Welcome to The Trust

The Employee Ownership Difference

The Management Trust is the only 100% employee-owned company in the community association
management industry. Structured as an Employee Stock Ownership Plan (ESOP), we are able to offer
potential employees something they cannot get at any other firm in our industry; ownership interest in
the company. This unique offering allows us to attract and retain the top national talent in community
association management.

Our structure as an ESOP brings with it a culture of entrepreneurialism that directly benefits each of our
clients. Every employee who touches a client account has a vested interest in ensuring the job is done
correctly and the promise to our client is fulfilled. Our service-based business model thrives on referrals for
new business. New business drives the firm, which in turn has a direct impact on each employee’s individual
bottom line. Simply put, our success is tied to the success of our clients.

The Story of Us

BILL SASSER, CEO

An interesting thing happened one day back in 2004. Marshall Fant and I, the two co-owners of Transpacific Management Service, looked at each other and said, “So, what should we do with the rest of our lives?” From that simple conversation began the greatest and most rewarding professional journey either of us had ever embarked upon. But first, a bit of backstory.

Marshall and I had been partners since 1995, and had grown Transpacific into one of the premier community management firms in Southern California. Both of us brought quite a history to our partnership. He began his community management career in 1966 with Management Service Company, and I began my own in 1986 with Transpacific Management Company. After experiencing years of solid growth together and, more specifically, both of us reaching certain milestone birthdays, it was time for that fateful conversation. We explored many options for the company, but once we learned of this thing called an
ESOP (Employee Stock Ownership Plan), we immediately knew that was the answer. What better way to honor our employees, all of whom contributed to the success of the company, than by giving them ownership in the company? Simply put, employee ownership felt morally right.

But then, things got really interesting. It hit me that I now was responsible to all these new employee owners to grow the business and increase the value of their shares in it. One of the ways to achieve both objectives was to invite more companies to join in this new adventure of ours. So through 2005 Marshall and I shared our vision with a few trusted industry friends for a company that would be national in its scope and impact, and one that would represent- through our collective employee ownership- a paradigm shift for our industry. Because we are picky about whom we consider friends, we offered
our vision only with like-minded company owners whom we knew to have the highest integrity, and shared our philosophical approach to corporate culture, employee ownership values and the community management industry.

Just like that, a mere 18 months after forming our ESOP, The Management Trust was born. The Management Trust brought together under a single employee ownership structure some of the most well respected community management firms in the Western United States including:

CDC Management (Washington)

Northwest Community Management (Oregon)

Kocal Management Group (Northern California)

Goetz Manderley (Central California)

Monarch Management Group (California Desert)

Transpacific Management Service (Southern California)

After surviving the inevitable bumps and bruises that accompany merging six firms into one, we decided it was time to expand the family further. We added a Las Vegas, Nevada office to our roster, and invited a few more firms to join The Management Trust. More recently, we have
welcomed into The Management Trust:

Parker Finch Association Services (Arizona, Nevada, Colorado)

Cuellar Realty (Arizona)

Professional Management Associates (Colorado)

TMC Management (Nevada)

We now serve community associations through Washington, Oregon, California, Nevada, Arizona and Colorado. And although we’ve grown considerably over the years, we have never lost sight of real purpose, to each other or to our clients. That purpose is reflected in our mission statement:
“Inspiring each other to take ownership of our potential.” To us, that means that every relationship is important and must be nurtured to its greatest extent. After all, conducting business without building strong relationships is neither fun nor much of a recipe for success. Our attorneys tell us we’re a company, but we feel more like a collection of people who take great pride in serving other people. That sounds like a pretty good business model to me.

It has been quite a ride since The Management Trust’s beginnings in 2005; challenging, exciting, rewarding and fun! The Management Trust is a journey I am grateful to have launched and one I continue to this day with the same vigor and enthusiasm.

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Welcome home

You’ve taken the first step toward what we hope will be an awesome decision. We would love to talk to you about partnering with your community! Let’s start the conversation. Simply fill out this form to schedule a call with us or to request a proposal for management services. (Want to know more about us first? Read up on us here.)

Talk to the Trust

We know that community management is a local endeavor and always will be. Each of our local offices are filled with employee owners who are there to address any question you have, immediately, and with a smile.

Use our regional directory below to find your local team or just click the “email us” button to get started.

Find your local office

How can we serve you?

The Management Trust is privileged to represent more than 1,500 community associations nationally, providing innovative concepts for their development and operation. We remain keenly aware of each of our community association’s needs, making them better places to live. Here are some frequently asked questions and answers about our services.

What types of community associations do you manage?

Our job is to manage. Seems like a simple concept, but it’s a unique one in our industry. We work with you to establish objectives, then proactively turn your vision into reality. At The Management Trust, we understand that each community has a unique personality that is the sum of the individual residents. That is why each community association we manage is handled in a unique way.

Our experience allows us the expertise to manage any type of project, and specialize in everything from Homeowner and Condo associations to Large Scale and Master Planned communities. Are you in a specified Active Adult Community, High Rise, or Mixed Use development? We have a management team that is trained and certified to remain mindful of your goals and maintain your high expectations. For communities that have Declarant involvement, The Management Trust regularly works with both boards and builders to ensure the community flourishes upon completion.

Do you offer services for financial management independently?

We sure do. The Management Trust’s community association financial management services are not only included as part of our full service management program, they’re also offered independently to community associations requiring only financial management. All of our financial operations are SSAE 116 compliant and are highlighted by our TrustLink proprietary software. Our financial services include:

Help monitoring the reserve funds of community associations and providing practical investment solutions.

COLLECTION SERVICES

If the dues remain outstanding, The Management Trust executes their collection processes in accordance with the Board-approved delinquency policy.

DIRECT DEPOSIT

Offered for our homeowners’ convenience.

VENDOR BILLINGS MANAGEMENT

When vendor invoices are received, they are researched by our accounts payable department to ensure that they have not previously been paid and that vendor work has been completed. Bills are coded and categorized, ensuring expenses are correctly delineated in financial statements.

BUDGET PREPARATION

The budget is prepared by our accounting department and is reviewed until we’re confident that it is accurate and comprehensive. The budget is then provided by the manager in the board package, for review and approval, well in advance of the annual deadline.

AUDIT COORDINATION

Your community association manager provides the Board with proposals from various, reputable independent audit firms. Once the Board chooses an auditor, our accounting department provides all requested documentation to ensure ease of review and reporting.

ESCROW SERVICES

Escrow demand statements and change of ownership records, among many other certifications and verifications, are produced by our in-house escrow staff on behalf of the association.

What services do you offer to builders and developers?

The property development teams at The Management Trust possess a wealth of experience and practical involvement in the planning and management of homeowners and condominium associations. We provide our builders and developer partners with expertise and services poised to help them build strong, successful community associations.

The Management Trust knows what the departments of real estate want to see in each state we operate in. Providing it to them on the first submission saves our clients time and money. We review plans and make recommendations on common area amenities, security features and other building-related systems.

Employees at regional offices throughout The Management Trust share best practices and experience in all types of communities, from high-rise, mixed-use projects, to master planned communities, to those with environmental considerations including water quality or lake and stream issues.

Our property management development teams also provide insight on working efficiently with architecture and engineering firms to remain vigilant about common design pitfalls and oversights, as well as, produce quality results in all aspects, from initial budget preparation to transitioning the management to the
community association.

So, to recap, we help prevent unnecessary costs and delays, and equip property development partners, builders and community associations for success, by providing support at every stage of the process. Building a community is hard enough, we make setting up the HOA easy.

Trusted Partners Program

Good for the vendor and good for the community.

Our Trusted Partners program is not only a risk management and quality assurance product for our client community associations, but it is also a business development and cost savings program for our vendors. That's what we call a "win, win". The impact of this program is readily apparent to our clients and vendors
alike.

Our Trusted Partners program is much more than being ‘added to the vendor list’. The Management Trust's better vetting process only accepts vendors who deliver high quality services, in a cooperative manner, for a fair price into our program.

The benefits for the vendor are palpable in three ways. First, Trusted Partners have the greatest opportunity to bid on services and most Trusted Partners experience a much higher win rate based on this status. Second, we provide a $2,500 client satisfaction guarantee for work performed by our enrolled vendors.
And third, our full contractor liability insurance coverage is provided to you at a lower than market rate for work completed in Trust communities, helping your bottom line smile.

Bringing together great vendors with HOAs that need their services is essential in fulfilling our mission to create the best community associations in the country. If you’re a service provider looking to grow your business volume and reduce overhead, then the decision is easy. Become a Trusted Partner.

Escrow documents and transfers

The Management Trust uses HomeWiseDocs to simplify the process of disclosing information for the sale or refinance of your property. This system affords you tremendous controls over the timely processing, delivery, and record retention required to meet and exceed state regulations.

Documents are available for purchase individually and in bundles. Simply create an account at Home-WiseDocs.com to order documents such as: CC&Rs, Budgets, Reserve Studies, Insurance Declaration Pages.

Blog

A condo association's insurance policy typically helps cover the structure of the building and common areas. The association's policy, however, may or may not extend to the inside of your unit. And its coverage could be dependent on your state's laws. It's important to understand what a condo association's policy covers and how that differs from a condo owner's insurance policy.

The liability protection in a condo association's insurance policy may help cover legal or medical costs if the association is hit with a lawsuit — for example, if someone is injured after slipping and falling in a common area maintained by your association.

Then there's property coverage, which helps provide protection against covered perils for the common areas of the building that you share with all the other residents, like the roof, elevator, basement, courtyards or walkways.

When it comes to your unit, the Insurance Information Institute (III) says in some cases, the association's insurance may help protect the bare walls, floors and ceiling of your condo. You would then be responsible for covering things like kitchen cabinets, appliances, bathroom fixtures, and any plumbing and wiring in your unit with your own insurance policy.

Other times, the association's coverage may help protect your condo as it was built, including fixtures such as the original tub and appliances, according to the III. In this case, you would likely be responsible for the cost of replacing any upgrades in your unit.

The only way to really know which structural parts of your condo are covered by the association is to read its bylaws to learn what parts of your home are covered by the master insurance policy.

WHAT DOES A CONDO OWNER'S INSURANCE COVER?

A condo owner's insurance policy may include the following coverages:

Protection for your personal belongings against covered losses

Coverage for damage to the interior of your unit resulting from certain causes

Additional living expenses if you're the victim of a fire or another disaster covered by your policy. (This coverage is usually available only if the covered loss makes your condo unfit for living.)

Liability protection to help protect you if you're sued or if you are found at fault after someone has an accident in your unit

You may also want to ask about what other coverages your policy may include. For instance, loss assessment coverage may reimburse you for your portion of a bill split among all condo owners for a covered loss, such as a fire in your building's lobby, the III says. So, while you may not be shoveling the driveway or mowing the lawn as a condo owner, you still want to take the right steps to protect yourself and your investment in your place.

Board meetings provide a forum for disagreement when well intentioned board members do not see eye to eye on how to run an association. The utilization of Robert’s Rules of Order, the most widely used manual for parliamentary procedure in the United States, is essential to having differing opinions shared in a civil manner. All too often, boards will not use any form of parliamentary procedure, and board meetings end in screaming matches where little is accomplished. Here is an overview of the rules:

Motions

A motion is a proposal that the entire membership take action or a stand on an issue. Individual members can:

Call to order

Move a motion

Second a motion

Debate motions

Vote on motions

Basic Types of Motions

Main Motions introduce items to the membership for their consideration. They cannot be made when any other motion is on the floor, and yield to privileged, subsidiary, and incidental motions.

Subsidiary Motions change or affect how a main motion is handled, and are voted on before a main motion.

Privileged Motions bring up urgent items about special or important matters unrelated to pending business.

Incidental Motions provide a means of questioning procedure concerning other motions and have priority.

Presenting Motions

Obtaining the floor

Wait until the last speaker has finished.

Rise and address the Chairman by saying, "Mr. Chairman, or Mr. President."

Wait until the Chairman recognizes you.

Make Your Motion

Speak in a clear and concise manner.

Always state a motion affirmatively. Say, "I move that we ..." rather than, "I move that we do not ...".

Avoid personalities and stay on your subject.

Wait for Someone to Second Your Motion

Another member will second your motion or the Chairman will call for a second.

If there is no second to your motion it is lost.

The Chairman States Your Motion

The Chairman will say, "it has been moved and seconded that we ..." Thus placing your motion before the membership for consideration and action.

The membership then either debates your motion, or may move directly to a vote.

Once your motion is presented to the membership by the chairman it becomes "assembly property", and cannot be changed by you without the consent of the members.

Expanding on Your Motion

The time for you to speak in favor of your motion is at this point in time, rather than at the time you present it.

The mover is always allowed to speak first.

All comments and debate must be directed to the chairman.

Keep to the time limit for speaking that has been established.

The mover may speak again only after other speakers are finished, unless called upon by the Chairman.

Putting the Question to the Membership

The Chairman asks, "Are you ready to vote on the question?"

If there is no more discussion, a vote is taken.

On a motion to move the previous question may be adapted.

Voting on a Motion

The method of vote on any motion depends on the situation and the by-laws of policy of your organization. There are five methods used to vote by most organizations, they are:

By Voice -- The Chairman asks those in favor to say, "aye", those opposed to say "no". Any member may move for a exact count.

By Roll Call -- Each member answers "yes" or "no" as his name is called. This method is used when a record of each person's vote is required.

By General Consent -- When a motion is not likely to be opposed, the Chairman says, "if there is no objection ..." The membership shows agreement by their silence, however if one member says, "I object," the item must be put to a vote.

By Division -- This is a slight verification of a voice vote. It does not require a count unless the chairman so desires. Members raise their hands or stand.

By Ballot -- Members write their vote on a slip of paper, this method is used when secrecy is desired.

There are two other motions that are commonly used that relate to voting.

Motion to Table -- This motion is often used in the attempt to "kill" a motion. The option is always present, however, to "take from the table", for reconsideration by the membership.

Motion to Postpone Indefinitely -- This is often used as a means of parliamentary strategy and allows opponents of motion to test their strength without an actual vote being taken. Also, debate is once again open on the main motion.

Parliamentary Procedure is the best way to get things done at your meetings. But, it will only work if you use it properly.

It’s our last installment of Board Member 101. We’ve touched on 6 topics ranging from roles of Representatives to the three types of meetings. We hope this has given you an overview of all the basic things one would need to know on rules, roles and how to run a meeting. To finish it off, we are diving into what qualifies as a Specific Duty meeting.

Meeting type number one:

Budgets:

Must adopt a budget for daily operations and contributions to the reserves every year

Look at previous budgets for the last 3-5 years as a model for the current budget

Consult with an accountant

Within sixty days of adoption of the budget, a summary must be mailed to all unit owners

A meeting must be scheduled not less than fourteen days nor more than thirty days from the mailing of the summary

The budget will be ratified unless a majority of the homeowners votes to reject it

Meeting type number two:

Reserves:

Reserves provide for replacement and repair of an element when its useful life has ended

Adequate reserves are required by Nevada law. Hard to define.

Reserve Studies indicate elements and life expectancy and estimate of cost repair.

Necessity for Reserves:

Fulfills fiduciary and professional requirements for Boards and managers to plan for the future

Reserve amounts required to be disclosed to potential buyers

Maintenance of Reserves:

Must have a reserve study conducted at least every five years

The Board must review the reserve study at least once a year to ensure that the reserve study is still accurate.

Meeting type number three:

Investing Reserve Funds:

Avoid unsuitable investments.

The Board has a fiduciary responsibility to all owners to ensure funds are properly invested. Reserve funds may not be invested in instruments that a reasonable person would consider risky or unsafe.

Nevada law requires that all Association funds be kept in a federally insured financial institution authorized to do business in Nevada.

The Board should also ensure that the funds are available when needed.

To ensure a wise investment decision, Associations should:

Consult with legal and financial advisors about state laws related to reserves

Review Association documents related to reserve funds

Develop a written policy for reserve fund investments

Review the investment policy each year

Board members have a fiduciary responsibility to the Association and they may not delegate their legal obligation to protect the Association’s assets. The Board must invest Association reserve funds responsibly and in a way that provides first safety on the principle, then liquidity, and finally yield.

Things to consider:

Safety:

Safety of income - measures the likelihood that anticipated income from an investment will continue to be paid in the amount expected and at the time expected.

Safety of principal - refers to whether the principal value of the investment available at the outset will be available at maturity.

Both categories of safety can vary in degree with specific investments.

Liquidity:

Liquid investments can be converted quickly into cash for emergency use or investment opportunities. Community Associations need liquid funds because a major repair or maintenance job could arise at any time.

Yield:

Yield is simply the return received on the investment. Generally, the longer the maturity period, the higher the yield; the shorter the maturity period, the lower the yield. Hence, a five-year CD usually yields more than a one-year CD. Also, the safer the investment, generally the lower the yield.

The Board can protect its investment choice by addressing the following topics, before formulating an overall investment policy:

How is the amount of the monthly assessment determined?

When the budget is prepared, the amounts necessary for the daily operation and long-term reserves for maintenance and replacement are determined based on the level of service for which the association is both required and willing to pay. For example, sometimes there are specific items defined in the CC&Rs that require a certain level of maintenance by the association.

Once the annual amount is determined, then it must be collected from the members in order for the association to operate. Each member’s assessment is usually collected monthly, in 12 equal installments. Some associations collect assessments on a quarterly or annual basis. The CC&Rs will normally indicate the frequency of assessment collections.

Are there different types of assessments or fees?

There are several types of assessments that may apply to your association. The California Civil Code defines assessments as either being regular or special. Regular assessments are needed for the operating (day-to-day) and reserve (long-term maintenance) activities of the association.

Special assessments are those levied by the association for major repairs, replacement, or new construction of the common area or for a one-time, unanticipated expense which cannot be covered by the regular assessment (e.g., insurance premiums that unexpectedly rise sharply).

Note, a special assessment should not be confused with a monetary penalty levied by the association against an individual owner to reimburse the association for an expense such as damage to the common area, or imposed as a disciplinary measure for a violation of the rules and regulations. Homeowners can be fined for damaging common areas and/or violating any rules and regulations of the association. Some CIDs establish user fees or special charges for services and activities that are not customary. Typically, these are imposed on an owner specifically benefiting from the service, such as an owner who wants to use the common area pool, clubhouse, or tennis courts to entertain private guests. The fees are usually on a pay-as-you-go basis and generally cannot become a lien on the owner’s unit or interest. There are other types of assessments that may be designated by the CID homeowners association. For example, an association may have an assessment for cable television service. A “reimbursement assessment” may be levied against an individual owner as a charge for damage to the common area resulting from an act by the owner or an owner’s guest. The best place to look for the different types of assessments that may apply to a CID is in the CC&Rs of the association.

Who can increase the amount of the assessment?

The board of directors can increase the amount of the assessment by following certain procedures mandated by California Civil Code sections 5605 and 5610. Even if the governing documents (Civil Code section 4150) are more restrictive, the board of directors may not increase the regular assessment more than 20 percent per year, without the approval of the owners. The board must circulate a budget to the membership 30 to 90 days before the end of its fiscal year (Civil Code section 5300). If the budget indicates that an assessment increase greater than 20 percent is necessary, a majority of the members of the association must approve the assessment. There are also provisions for a board to increase an assessment more than 20 percent without member approval in cases of emergency such as an extraordinary expense required by order of a court, or for repairs to the common area.

What happens if you do not pay your assessments?

Usually, the association will send you a reminder letter as a first step. The law is specific in California regarding the due date of assessments and the overall process that an association must follow regarding delinquent assessments. The law states that if an assessment is not paid within 15 days of the due date, a delinquency occurs, unless the governing documents provide for a longer time. At this point, the association can add a charge to your assessment in the form of a late fee in the amount of $10 or 10 percent of the monthly assessment amount, whichever is greater, unless the CC&Rs specify a lesser amount. Again, the law covering this area is quite clear and the board must follow these procedures.

Once a year, the association will send each owner a copy of the assessment collection policy, which will tell you the amount of the late fee. If your assessment becomes over 30 days delinquent the association has the right to assess interest up to 12 percent per year on the balance that is owed and unpaid. If you still fail to pay your assessments, the matter may be referred to an attorney or foreclosure service. The association has the right to lien your property for the amounts owed as well as other costs such as attorney’s fees. Ultimately, the association can foreclose and take your property for your failure to pay assessments. A personal judgment may also be entered against you. As you can see, it is imperative that all owners pay their assessments in a timely manner. Failure by several owners to pay their assessment obligation could place the association in financial jeopardy.

Last week we touched on a long list of details that go into Board Meetings, both regular and emergency. This week, we’re talking about the 2nd type of Association meetings; Homeowner Meetings. Read on to learn the ins and outs of how these typically run. If you want to catch up on all our other entries in the Board Member 101 series, head to the end of the post to find the links.

Notice

Not less than fifteen days nor more than sixty days before the meeting, the secretary or other officer, as specified in the Bylaws, must either hand deliver or send by United States mail to the mailing address of each unit owner notice of the unit owners meeting. The owner may request, in writing, that the notice be sent to an alternative address. The notice must include an agenda for the meeting and notification of the right of an owner to:

Have a copy of the minutes or a summary of the minutes of the meeting provided upon request. The unit owner may be required by the Board to pay the cost of providing the minutes.

Speak to the Association or Board, unless the Board is meeting in executive session.

Agenda

The agenda must adhere to the same as for Board Meetings (see more on those here).

Meeting

A meeting of the owners must be held at least once each year. If the governing documents do not provide a date for the annual meeting, a meeting of the owners must be held 1 year after the date the last meeting was conducted. If a meeting has not been held in over 1 year, a meeting of the unit owners must be held on March 1st.

Quorum

Unless the governing documents specify otherwise, 20 percent of the total voting members must be present at the beginning of the meeting.

The quorum rules do not change the actual number of votes that are required under the governing documents for taking action on any particular matter.

Special Meetings

A special meeting of the unit owners may be called by the president, a majority of the executive Board, by 10 percent of the unit owners, or any lower percentage specified in the Association’s Bylaws of the total number of voting members.

Did you know there are three types of Association meetings? These three meetings consist of Board meetings, homeowner meetings, and meetings on specific duties. Today we will touch on the details of Regular and Emergency Board Meetings. If you’ve ever wondered about how these meetings work in your community, keep reading and be in the know!

Board Meetings (Regular and Emergency)

Unless the CC&Rs or Bylaws provide a shorter period, a meeting of the Board must be held at least once every quarter and not less than once ever one hundred days.

They must also review the following financial items:

A current year-to-date financial statement of the Association

A current year-to-date schedule of revenues and expenses for the operating account and the reserve account, compared to the budget for those accounts

A current reconciliation of the operating account of the Association

Financial items to be reviewed every quarter and not less than every 100 days:

A current reconciliation of the reserve account of the Association

The latest account statements prepared by the financial institutions in which the accounts of the Association are maintained

The current status of any civil action or claim submitted to arbitration or mediation in which the Association is a party

Notice:

Except in an emergency or unless the Bylaws require a longer period of notice, at least ten days before the date of the meeting, the notice must be sent by U.S. mail to the mailing address of each unit or another address as requested in writing by the unit owner

Or published in the newsletter or other publication circulated to each unit’s owner

Notice may be sent electronically with owner consent

Must state the time and place of the meeting and include a copy of the meeting agenda or date and location where a copy of the agenda may be obtained

Must notice of a unit owner’s right to obtain a copy of the minutes or summary of the minutes at their own expense and their right to speak to the Association or Board, unless the Board is in executive session

Emergency Meetings:

In an emergency, an Association shall send the notice of the meeting by U.S. mail or the mailing address of each unit within the community. If mail is impractical, the notice must be hand-delivered to each unit or posted in a prominent place(s) within the community

Agenda Must Contain:

Topics to be discussed included proposed amendments to the CC&Rs or Bylaws, any fees or assessments to be imposed or increased, any budgetary changes and any proposal to remove an officer or member of the Board

A list of items on which action may be taken, clearly denoting what action might be taken by the Board

In an emergency, the Board may take action on an item which is not listed in the agenda

A period devoted to owner discussion scheduled at the beginning and at the end of the meeting. Except in emergencies, no action may be taken upon an issue raised during the homeowner discussion

Executive Session - A Board may meet in executive session only to:

Consult with an attorney for the Association on matters relating to proposed or pending litigation if they contents of those communications are subject to the attorney-client privilege

Enter into, modify or take other action on a contract between the Association and an attorney

Discuss the character, alleged misconduct, professional competence, or physical or mental health of a community manager or an employee of the Association

Discuss a violation of the governing documents alleged to have been committed by a unit owner, unless the unit owner requests in writing that an open hearing be conducted

Discuss the alleged failure of an owner to adhere to a schedule

A unit owner is not entitled to attend or speak at a meeting of the Board held in executive session

An open hearing of the Board on an alleged violation of the governing documents may be held pursuant to the written request of the unit’s owner who allegedly committed the violation. Such owner may attend all portions of the hearing and testify concerning the alleged violation, except for deliberations of the Board.

Homeowner Comments:

A period for homeowner comments and discussion must be scheduled for the beginning (Agenda items only) or end of each Board meeting

The homeowners are usually given a limited time to speak

Minutes:

The Secretary or other Officer specified in the Bylaws shall cause minutes to be recorded or otherwise taken at each meeting of the Board

Within thirty days after each meeting, the minutes or a summary of the minutes must be made available to the units’ owners

A copy of the minutes or a summary of the minutes must be provided to any unit’s owner upon request and, if required by the Board, upon payment to the Association of the cost of providing the copy to the unit’s owner

Any matter discussed in executive session must be generally noted in the minutes of the meeting of the Board. The Board shall maintain minutes of any decisions made regarding a unit owner’s alleged violation of the governing documents, and shall provide a copy of the decision to the alleged upon request

Quorum:

Unless the governing documents specify a larger percentage, a quorum is deemed present throughout any meeting of the Board if persons entitled to cast fifty percent of the votes on that Board are present at the beginning of the meeting

Voting:

Only votes cast in person, by secret ballot or by proxy, are counted. No votes allocated to a unit owned by the Association may be cast

If only one homeowner from a unit is present at the meeting of the Association, that owner is entitled to cast all votes allocated to that unit. If more than one of the unit owners is present, the votes allocated to that unit may be cast in accordance with the agreement of a majority in interest of the owners, unless the CC&Rs state otherwise. There is majority agreement if any one of the owners cast the votes allocated to that unit without protest made promptly to the person presiding over the meeting

Voting Proxies:

A unit’s votes may be cast by written proxy. A unit’s owner may give a proxy only to a member of his immediate family, a tenant of the unit’s owner who resides in the common-interest community, another unit’s owner who resides in the common-interest community. If more than one person owns a unit, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through an executed proxy. A unit’s owner may revoke a proxy given pursuant to this section only by actual notice of revocation to the person presiding over a meeting of the Association

We recently held a basic training for Board Members at our Nevada Division. Attendees received an overview of the basic things one would need to know on rules, roles and how to run a meeting. With such useful information compiled for the event, we thought it would be great to share with those in the Community Association world. We're already on Part 5, so head to our blog to read the first four, then join us as we share an even deeper look inside our Board Member Boot Camp!

Today we are touching on how to avoid liability:

- Rely upon your professional manager

- Read and understand your governing documents

- Stay informed of changes in the law

- Handle issues in a timely manner

- Consult with outside professionals before making decisions. This could be:

a. Your professional manager

b. Accountants

c. Attorneys

d. Architects

e. Reserve Study Specialists

f. Contractors

g. Engineers

h. Landscapers

i. Insurance Agents

- Avoid conflicts of interests (no gifts or other compensation that would improperly influence their decisions)

- Keep proper records

- Ensure your community is adequately protected

- Adequately funding reserves

- Be respectful of other Directors and owners

- Association meetings (there are 3 types which we will touch on in the coming weeks!)

Have you been keeping up with Board Member 101? In this series, we are sharing all the basic things one would need to know on rules, roles, and how to run a meeting. Today, let's look at Part 3, the Fiduciary Duties of Directors.

The Director must operate in a position of trust and adhere to specific standards of care including:

- Obligation of good faith

- Place the interests of the Association ahead of their own

- Avoid conflicts of interest when

a. Voting on a contract where a Director's company is a bidder

b. Deliberating or voting on a fine for violations of the governing documents regarding your own home

c. Company you work for has an ownership interest in a bidder

- If conflict exists, recuse him/herself and not deliberate, participate, or vote on the pending matter

All officers and members of the executive Board are fiduciaries and shall act on an informed basis, in good faith, and in the honest belief that their actions are in the best interests of the Association.

Board Member 101 was created to give you a look inside of our recent training held in our Nevada Division. We recapped the roles of association representatives in our last post, and in part two we’re jumping to requirements.

This week let's discuss... What is required of a Board Member?

- Comply with applicable federal, state and local laws.

- Enforce the provisions of the governing documents.

- Hold meetings with such frequency as to properly and efficiently address the affairs of the Association.

- Ensure the Board obtains at least 3 bids from service providers who possess proper licensing for any service used.

- Ensure the Board consults with appropriate professionals before making major decisions.

We recently held a basic training for Board Members at our Nevada Division. Attendees received an overview of all the basic things one would need to know on rules, roles and how to run a meeting. With such useful information compiled for the event, we thought it would be great to share with those in the Community Association world. We’ve broken it down into bite sized posts you can read through at your convenience and come back to reference if you have any questions! Let’s take a look inside our Board Member Boot Camp, first up:

What are the roles of Association representatives?

- The Executive Board is comprised of at least 3 directs, all of whom must be unit owners.

- This Board elects the Officers.

- Officers include a President, Secretary and Treasurer. In some cases, one person is permitted to hold two or more offices.

- Officers serve at the will of the Board.

- All members must certify within 90 days, that they have read and understand the provisions of the governing documents.

- Board Members are required to exercise the ordinary and reasonable care of directors of a non-profit corporation.

It is with great pride and pleasure to announce that one of our fellow employee owners, Pam Hunt, is the winner of the 2017 CACM Vision Award!! Through the Vision Awards Program, CACM identifies those who exemplify the very best in the profession of community management; honors their contributions to the profession; and recognizes the positive difference that they have made in the lives of their colleagues, association homeowners and the communities in which they live.

We wanted to share the nomination narrative that was submitted to CACM to recognize Pam's hard work and dedication to the communities she serves with pride every day.

In just over two weeks, Southern California experienced two catastrophic fires that consumed well over 8,000 acres and destroyed dozens of homes in Orange County. Shortly after this, a fire burned more than 50,000 acres in Northern California wine country, destroying at least 1,500 homes and business and forced an estimated 20,000 people to evacuate the area. It was an alarming reminder for many of us the impact brush, grass and forest fires have on individuals, properties and the economy. Knowing this impact well before this tragedy occurred, is what triggered this manager to take a proactive approach and work towards eliminating the related hazards that a brush or grass fire could cause upon her community association.

Due to this particular association’s proximity to a high fire hazard zone, this manager had to work closely with her board, community, and the Orange County Fire Authority (OCFA) to ensure that they complied with their Fuel Modification Plan and Fire Safety Awareness Programs. With an association that covers over 65 acres, two-thirds of which is maintained by the Association, this was no easy task. The community was planned in accordance with the Fuel Modification requirements and standards that were in place almost two decades ago and over the years, this community successfully managed their green space, hillsides, and common areas in accordance with these standards.

However, in the past few years, the Fuel Modification County Guidelines changed substantially. The current association budget could not sustain long-term management of the costs required to meet the updated FuelModification guidelines as the zones were outlined. In an effort to minimize the financial impact to the community, while complying with these new guidelines, and of course protecting the community from wildfires moving forward, the HOA Board and this community manager worked tirelessly with the assistance of Fire Safe Counsel to reduce the overall fuel modification zones with the OCFA and to optimize the current areas.

After a year of meetings, with OCFA and a Fire Modification Specialist firm, this manager was instrumental in obtaining OCFA approval on a revised 2017 Fuel Modification plan for her community association. The revised plan continued to reduce the risk of wildfires, while also reducing community water usage and the environmental footprint. As part of the plan, the community manager facilitated and ensured completion of a large-scale, community-wide project that included removing existing plant material within 50 feet of all properties, replanting areas and slopes with drought tolerant, certified low fire risk material and re-engineering of the watering zones.

However, she did not stop there. In facilitating this project, she learned of the “Firewise USA” program. This national program empowers neighbors to work together in reducing their wildfire risk by taking action and ownership in preparing and protecting their homes against the threat of wildfire. The application process is not an easy one. A community must first develop an action plan that guides their residential risk reduction activities after obtaining a wildfire risk assessment from the state forestry or fire department. The community then sponsored and held a “Firewise Day”, in addition to a required monetary and volunteer-hour investment in local Firewise activities.

With her knowledge and expertise in the community management field, as well as in working with fuel modification plans at this and other communities, she guided the board and membership through the application process, and as a result, this association was recently recognized as an official Firewise Communities/USA community, joining over 1400 communities nationwide that have been recognized since the program’s inception in 2002. With this designation, the community will get preference when allocation of grant money is made for wildfire safety or fuel mitigation. In addition, the Association is exploring its eligibility for lower fire insurance options, state and national grant funds and other Firewise community program benefits.

By far the most notable result from this manager’s effort was that the community withstood the Canyon Fire 2 in early October, which ravaged through the eastern edge of Orange County and came within a stone’s throw of this association. This community manager’s passion, dedication and commitment to the betterment of her communities was evident in her perseverance; working tirelessly with this association to promote wildfire education, planning and action to reduce the risk of death, injury, property and economic loss. Because of this, she is well deserving of the CACM Innovator Award!

Unless you’ve been living on your own private island, in the middle of the south Pacific, with a coconut drink in your hand, you definitely know this year’s flu season is abnormally bad. According to Dr. Dan Jernigan, CDC Influenza Division Director, “This is the first year we had the entire continental U.S. be the same color on the graph, meaning there’s widespread activity in all of the continental U.S. at this point.” Aside from getting a flu vaccine, here are some common things that you should disinfect immediately.

Cell Phones

Deep Clean your Cell Phone With the amount we use our phones, it shouldn’t be a surprise that a 2012 study by the University of Arizona found that cell phones have more germs than toilet seats. Yuck! Keep your hands clean, wipe down the surface with an antibacterial microfiber cloth, and spray cleansers onto a cloth rather than directly on the screen to prevent damage.

Kitchen Counters and Faucets

Since the kitchen is usually the familial gathering spot, the counter and faucet get touched by germy hands constantly. To keep this area bacteria-free, spritz porous stone (like granite) with a disinfecting spray. To unearth stuck-on gunk around the faucet try Mrs. Meyer’s Vinegar Gel Cleanser and let sit for three minutes before wiping away.

Don’t Forget the Doorknobs

Germs last longer on surfaces than you might think. To sanitize the doorknobs around your house (focus on high-traffic spots, like the bathroom door), cleanse them with a germ-destroying wipe, such as Clorox Disinfecting Wipes.

Disinfect Stuffed Animals and Blankets

If the kiddos have been sick, make sure their favorite stuffed animal isn’t holding onto their germs. Check the tag on stuffed animals to see if it can go in the washing machine, then place it inside a pillowcase secured with a twist tie. Use Woolite, wash on the gentle cycle and tumble dry on a cool setting. Throw their blankets in there as well.

Toothbrush and Toothbrush Holder

It is particularly important to clean your holder regularly if it has a closed bottom, like a cup. Wash your toothbrush holder or cup with soap and water. Your toothbrush can be put into the silverware compartment of the dishwasher to be sanitized. You can also soak your toothbrush in antibacterial mouthwash; rinse thoroughly before next use.

With the advent in the past 5 years of short-term rental websites and apps like Airbnb, VRBO, and Homeaway, many homeowners raced to see what their association’s governing documents allow when it comes to leasing and renting of lots and units. Many individuals praise the growing popularity of short-term rentals, citing the economic benefits for those renting out their properties, and the benefits of convenience, comfort, and choices for those looking for alternatives to the hotel industry. However, not everyone sees agrees with these benefits, and point to the less desirable traits that these “weekend guests” bring with them, such as increase in traffic, security issues, and increase in noise and trash, etc.

Many questions are starting to be answered by state and municipal legislatures, as well as associations, on how they will deal with this growing trend.

Arizona Law Currently Allows Associations to Prohibit Short-Term Rentals

In 2016, Arizona’s Governor signed Senate Bill 1350 into law, officially prohibiting Arizona cities and towns from prohibiting vacation rentals or short-term rentals. This bill is codified in A.R.S. Section 9-500.39. Although cities and towns can still create rules and regulations governing short-term rentals and fire codes, health and sanitation, and zoning ordinances, no municipality can legally prohibit short-term rentals.

With cities and towns no longer able to prohibit short-term rentals, many Associations began examining what their own documents have to say about short-term and vacation rentals. Currently, Arizona law does not prohibit associations from disallowing short-term rentals in their communities. Although this may change in the not-too-distant future, associations are allowed to regulate and prohibit short-term rentals.

What Kind of Association Restrictions are Enforceable?

Although the Arizona legislature has not yet taken away associations’ ability to prohibit short-term rentals, Arizona law is quite specific about the manner in which associations must prohibit these types of leases. Specifically, Arizona law states that an owner may use his property as rental property unless rentals are prohibited in the Declaration, including any time period restrictions contained in the Declaration. See A.R.S. Section 33-1260.01(A) (for condominiums) and A.R.S. Section 33-1806.01(A) (for planned communities).

Essentially, this means that any rental prohibitions or time period restrictions contained in other Association documents (such as the Bylaws or in Rules and Regulations) are insufficient to restrict owners’ use of their property for rentals. The restrictions against rentals must appear in an Association’s Declaration (CC&Rs) to be enforceable. If your Association’s CC&Rs are currently silent on the rental issue, the document must be amended to include any restrictive language – a Board resolution or policy will not do. Also note, however, that the Association can also make Rules governing leases if there is a rental-restriction provision in the CC&Rs, as discussed further below.

Further, there are also questions raised about what kind of language in the CC&Rs is sufficient to restrict or prohibit short-term rentals. For example, obviously a provision in the CC&Rs that states “Owners may not lease their Unit for fewer than 30 days” is a clear restriction against short-term rentals, and is

enforceable. However, what about more ambiguous language such as “the Unit shall not be used for transient or hotel purposes,” or simply that the Unit shall not be used for “business purposes.”

Currently, case law throughout the country comes to differing conclusions on whether the “Business Use” restrictions in CC&Rs prohibit short-term rentals, such as weekend Airbnbs. The same is true for the “hotel” or “transient” language in some documents. Arizona courts have not yet weighed in on this issue. One court considered whether the listing for the rental included typical hotel “amenities” such as fresh towels, complementary WiFi, maid service, room service, etc. in holding that an owner’s use violated the provision restricting a Unit’s use for hotel uses. As short-term rentals continue to expand, certainly more courts will weigh in on this issue and provide further guidance.

What Information from Tenants is the Association Entitled to?

Even if the Association’s CC&Rs prohibit rentals for less than thirty days, the Association can generally create “leasing rules” to govern any owners who do rent their units. For both condominiums and planned communities, Arizona law allows Associations to require owners to provide (1) the names and contact information for all adult tenants; (2) the time period of the lease; and (3) a description and license plate numbers of the tenants’ vehicles. See A.R.S. 33-1806.01; A.R.S. 33-1260.01. An association may also charge a fee of not more than $25 to process this information.

Keep in mind, associations are always prohibited from requiring an Owner to provide the Association with a copy of the tenant’s rental application, credit report, lease agreement/contract, and cannot charge a fee greater than $15 for incomplete or late information.

Contact an Arizona HOA Lawyer for Further Help

At Goodman Law, our sole focus is on meeting the legal needs of HOAs, including creating and implementing HOA policy and responding to homeowner concerns. Contact us today to discuss any legal challenge your HOA is facing.

Have you ever wondered which home improvements will give you the most bang for your buck? Here are the top remodeling projects that may increase your home’s equity:

#1 Landscaping

Are you shocked? I bet you thought it would be a major kitchen reno at the top of the list. A little color and light landscaping can make a big difference to your home’s curb appeal, and that is a big equity-booster.

What does a basic landscaping upgrade include?

· Flowering shrubs

· A 15-foot-tall deciduous tree

· A flagstone walkway

· Two 6-by-2 stone planters

· Fresh mulch

#2 A New Roof

No one wants to move into a place with water stains on the roof or walls. Yuck, what a turn-off!

Here are some signs it’s time to spring for a new roof:

· Shingles are missing, curling up, or covered in moss

· Gritty bits from the asphalt shingles are coming out of the downspout

· The sun’s shining through your attic

· You notice stains on ceilings and walls

· Your energy bill is sky high

#3 Hardwood Floors

If only real life was like all those home renovation shows where the couple rips back that shaggy 70s carpet only to find beautiful original hardwood floors. If that isn’t the case in your house then you might want to consider putting in some hardwoods. If you already have them, a fresh finish is a nice touch when comes time to sell.

#4 Patio or Deck

If you followed Step #1 then you have a beautiful landscaped yard, but where will you enjoy it? Your new or refinished patio or deck, that’s where!

#5 Garage Door

A new garage door will bump up that curb appeal at a relatively modest cost.

#6 New Siding

Pick any color in the rainbow and never have to paint again! These are just a couple of reasons to go with vinyl siding. Make sure you get siding with a fade resistant finish and a lifetime warranty that is transferable to the new owner when you sell.

As with any home renovation project, it is important to connect with your community management company before starting. At The Management Trust, we can help guide you through the process and help ensure you are abiding by the Covenants, Conditions and Restrictions for your community.

The employee owners of The Management Trust understand that quality and value are defined anew in every interaction we have with our homeowners and volunteer directors. Accordingly, we have established this Customer Bill of Rights to memorialize what every customer can expect from every Management Trust employee owner every day.

As a customer of The Management Trust you have the right to:

Feel like you are the most important person to us.

First person resolution when possible. That is, our employee owners will own your need until it is resolved or properly handed off to another team member for resolution. Although voicemail is a necessary part of the business world, we try our best to minimize its use and respond quickly when we do.

Be treated with respect and with the highest level of integrity because we are professionals.

Be treated with warmth and hospitality because we care.

Know you have been heard. We will not end any interaction until we have demonstrated that we understand your needs and have communicated to you our agreed upon next steps.

Value demonstrated through delivered results. When possible, we will offer alternative means of resolution so that you may choose the path that best fits for you.

Timely response. Voicemails and/or written communications will be responded to by the end of the next business day. Emergencies will receive an immediate response.

Leadership Management. We will work towards anticipating the needs of your community and offer guidance to the board and homeowners as appropriate.

Well-trained professionals. We are experts in the field of community management, and knowledgeable of the needs of your community.

Quick resolution to breakdowns. We own our mistakes and work tirelessly to correct them.

Fidelity. We know that we are in a position of trust with your community.

Typically, the corporate officers are also members of the board of directors, however, this may not be a requirement of the governing documents. Officers are appointed/elected by the members of the board and not by the membership. The appointment and responsibilities of the officers are generally stated here and may be more specifically described in the bylaws. Besides being a legal requirement in the bylaws, why should a board meet?

Like any family, sometimes there are misunderstandings about decisions made. Board meetings offer an opportunity to remove fear and confusion and replace it with supportive and shared responsibility.

Here are other reasons:

Builds synergy with owners.

It’s effective management.

Hear about the progress in the achievement of the various objectives of the corporation.

Hear reports of board committees and make policy decisions when required.

Provide a vehicle for board members to meet board members, for the board to meet the manager and for all owners to meet the board.

Provide on-going directives to the manager.

Maintain control over the organization to give guidance to committees.

Here we will continue the discussion of committees. If you haven’t already, click over to Part 1 here where we talk about their basic responsibilities.

For the board to be able to evaluate the conduct of committees it is important that periodic reports be submitted. These reports should be provided to the board (usually via the community manager) in writing and in advance of the board meeting, or as set forth in committee guidelines established by the board.

Board members need not attend committee meetings (unless required by the governing documents) however, board members have a right to attend. Board members need not participate in the committee meeting unless the committee chair requests them to do so. This practice is similar to the owner forum at a board meeting. Unless specific authority has been given to the attending board member, the board member may not “officially” represent the position of the board at a committee meeting, unless that position is current board policy. Remember – the board speaks with one voice or not at all.

Many boards choose to appoint members of the board as their committee liaisons so the conduct of the committees can be more carefully monitored. Whatever committee structure is chosen, it should be clearly defined and properly documented. Committees can be one of the most helpful tools in the governance of the association, or they can be a hindrance, depending on how well the board establishes and communicates with their committees.

Yes. The board may delegate authority to the manager and they may also utilize the committee structure to assist them in carrying out their duties and responsibilities. Some committees are mandated by the association’s governing documents, usually in the CC&Rs and/or bylaws.

If the governing documents do not require specific committees, the board may create and develop a committee structure to meet the needs of the community. Remember - committees are appointed by and serve at the pleasure of the board. The board establishes guidelines, goals and objectives for each committee. These should be reviewed and documented periodically.

As with any responsibility that involves volunteers, it is important to define who does what, how they accomplish the tasks, who is responsible, and to develop a system of rewarding the volunteers. Committee charters (aka job descriptions) are valuable tools to define the necessary structure for association committees.

A homeowners association (HOA) is a legal entity that governs a community of homes, including condominiums, townhomes, and single-family homes. HOAs operate within state statutes to enforce the rules and regulations and collect assessments from homeowners, all while taking care of maintenance repairs of common areas.

Recent studies have shown that over 66 million property owners are part of an association. With so many of us being a part of an HOA, we wanted to recap… why exactly is your HOA important?

Homeowners associations define and enforce the rules of the community set forth in the CC&Rs. Such rules exist for the betterment of the neighborhood since they help maintain the community’s appearance and home values to the benefit of all community owners.

HOAs define a budget for the community. Budgets typically include funds for the common area utilities (water, sewer, trash, and electricity), insurance, and the repair, maintenance, replacement, and restoration of various components within the community.

Community appearance. Homes within an HOA must meet the standards set by the association, so you're less likely to see unkempt lawns, peeling paint or a brightly painted house.

Common area. Homeowners associations handle the upkeep of swimming pools and tennis courts and other recreational areas so the common areas and shared amenities in a neighborhood are likely to be maintained in a good condition.

Say goodbye to pests. Most associations will go to great lengths to eliminate pests in the area. There will be no raccoons climbing into your garbage or termites eating up your walls.

A well-managed HOA provides financial stability by ensuring the HOA has an adequately funded reserve account available for future common area repairs and capital improvements, thereby reducing the likelihood of special assessments down the road.

In general, your HOA will provide a uniform, well-kept community, peace among neighbors and home value protection.

What are some other questions you might still have about your association? Ask in the comments and we will try to add clarity in a future blog post!

A condo association's insurance policy typically helps cover the structure of the building and common areas. The association's policy, however, may or may not extend to the inside of your unit. And its coverage could be dependent on your state's laws. It's important to understand what a condo association's policy covers and how that differs from a condo owner's insurance policy.

The liability protection in a condo association's insurance policy may help cover legal or medical costs if the association is hit with a lawsuit — for example, if someone is injured after slipping and falling in a common area maintained by your association.

Then there's property coverage, which helps provide protection against covered perils for the common areas of the building that you share with all the other residents, like the roof, elevator, basement, courtyards or walkways.

When it comes to your unit, the Insurance Information Institute (III) says in some cases, the association's insurance may help protect the bare walls, floors and ceiling of your condo. You would then be responsible for covering things like kitchen cabinets, appliances, bathroom fixtures, and any plumbing and wiring in your unit with your own insurance policy.

Other times, the association's coverage may help protect your condo as it was built, including fixtures such as the original tub and appliances, according to the III. In this case, you would likely be responsible for the cost of replacing any upgrades in your unit.

The only way to really know which structural parts of your condo are covered by the association is to read its bylaws to learn what parts of your home are covered by the master insurance policy.

WHAT DOES A CONDO OWNER'S INSURANCE COVER?

A condo owner's insurance policy may include the following coverages:

Protection for your personal belongings against covered losses

Coverage for damage to the interior of your unit resulting from certain causes

Additional living expenses if you're the victim of a fire or another disaster covered by your policy. (This coverage is usually available only if the covered loss makes your condo unfit for living.)

Liability protection to help protect you if you're sued or if you are found at fault after someone has an accident in your unit

You may also want to ask about what other coverages your policy may include. For instance, loss assessment coverage may reimburse you for your portion of a bill split among all condo owners for a covered loss, such as a fire in your building's lobby, the III says. So, while you may not be shoveling the driveway or mowing the lawn as a condo owner, you still want to take the right steps to protect yourself and your investment in your place.

Board meetings provide a forum for disagreement when well intentioned board members do not see eye to eye on how to run an association. The utilization of Robert’s Rules of Order, the most widely used manual for parliamentary procedure in the United States, is essential to having differing opinions shared in a civil manner. All too often, boards will not use any form of parliamentary procedure, and board meetings end in screaming matches where little is accomplished. Here is an overview of the rules:

Motions

A motion is a proposal that the entire membership take action or a stand on an issue. Individual members can:

Call to order

Move a motion

Second a motion

Debate motions

Vote on motions

Basic Types of Motions

Main Motions introduce items to the membership for their consideration. They cannot be made when any other motion is on the floor, and yield to privileged, subsidiary, and incidental motions.

Subsidiary Motions change or affect how a main motion is handled, and are voted on before a main motion.

Privileged Motions bring up urgent items about special or important matters unrelated to pending business.

Incidental Motions provide a means of questioning procedure concerning other motions and have priority.

Presenting Motions

Obtaining the floor

Wait until the last speaker has finished.

Rise and address the Chairman by saying, "Mr. Chairman, or Mr. President."

Wait until the Chairman recognizes you.

Make Your Motion

Speak in a clear and concise manner.

Always state a motion affirmatively. Say, "I move that we ..." rather than, "I move that we do not ...".

Avoid personalities and stay on your subject.

Wait for Someone to Second Your Motion

Another member will second your motion or the Chairman will call for a second.

If there is no second to your motion it is lost.

The Chairman States Your Motion

The Chairman will say, "it has been moved and seconded that we ..." Thus placing your motion before the membership for consideration and action.

The membership then either debates your motion, or may move directly to a vote.

Once your motion is presented to the membership by the chairman it becomes "assembly property", and cannot be changed by you without the consent of the members.

Expanding on Your Motion

The time for you to speak in favor of your motion is at this point in time, rather than at the time you present it.

The mover is always allowed to speak first.

All comments and debate must be directed to the chairman.

Keep to the time limit for speaking that has been established.

The mover may speak again only after other speakers are finished, unless called upon by the Chairman.

Putting the Question to the Membership

The Chairman asks, "Are you ready to vote on the question?"

If there is no more discussion, a vote is taken.

On a motion to move the previous question may be adapted.

Voting on a Motion

The method of vote on any motion depends on the situation and the by-laws of policy of your organization. There are five methods used to vote by most organizations, they are:

By Voice -- The Chairman asks those in favor to say, "aye", those opposed to say "no". Any member may move for a exact count.

By Roll Call -- Each member answers "yes" or "no" as his name is called. This method is used when a record of each person's vote is required.

By General Consent -- When a motion is not likely to be opposed, the Chairman says, "if there is no objection ..." The membership shows agreement by their silence, however if one member says, "I object," the item must be put to a vote.

By Division -- This is a slight verification of a voice vote. It does not require a count unless the chairman so desires. Members raise their hands or stand.

By Ballot -- Members write their vote on a slip of paper, this method is used when secrecy is desired.

There are two other motions that are commonly used that relate to voting.

Motion to Table -- This motion is often used in the attempt to "kill" a motion. The option is always present, however, to "take from the table", for reconsideration by the membership.

Motion to Postpone Indefinitely -- This is often used as a means of parliamentary strategy and allows opponents of motion to test their strength without an actual vote being taken. Also, debate is once again open on the main motion.

Parliamentary Procedure is the best way to get things done at your meetings. But, it will only work if you use it properly.

It’s our last installment of Board Member 101. We’ve touched on 6 topics ranging from roles of Representatives to the three types of meetings. We hope this has given you an overview of all the basic things one would need to know on rules, roles and how to run a meeting. To finish it off, we are diving into what qualifies as a Specific Duty meeting.

Meeting type number one:

Budgets:

Must adopt a budget for daily operations and contributions to the reserves every year

Look at previous budgets for the last 3-5 years as a model for the current budget

Consult with an accountant

Within sixty days of adoption of the budget, a summary must be mailed to all unit owners

A meeting must be scheduled not less than fourteen days nor more than thirty days from the mailing of the summary

The budget will be ratified unless a majority of the homeowners votes to reject it

Meeting type number two:

Reserves:

Reserves provide for replacement and repair of an element when its useful life has ended

Adequate reserves are required by Nevada law. Hard to define.

Reserve Studies indicate elements and life expectancy and estimate of cost repair.

Necessity for Reserves:

Fulfills fiduciary and professional requirements for Boards and managers to plan for the future

Reserve amounts required to be disclosed to potential buyers

Maintenance of Reserves:

Must have a reserve study conducted at least every five years

The Board must review the reserve study at least once a year to ensure that the reserve study is still accurate.

Meeting type number three:

Investing Reserve Funds:

Avoid unsuitable investments.

The Board has a fiduciary responsibility to all owners to ensure funds are properly invested. Reserve funds may not be invested in instruments that a reasonable person would consider risky or unsafe.

Nevada law requires that all Association funds be kept in a federally insured financial institution authorized to do business in Nevada.

The Board should also ensure that the funds are available when needed.

To ensure a wise investment decision, Associations should:

Consult with legal and financial advisors about state laws related to reserves

Review Association documents related to reserve funds

Develop a written policy for reserve fund investments

Review the investment policy each year

Board members have a fiduciary responsibility to the Association and they may not delegate their legal obligation to protect the Association’s assets. The Board must invest Association reserve funds responsibly and in a way that provides first safety on the principle, then liquidity, and finally yield.

Things to consider:

Safety:

Safety of income - measures the likelihood that anticipated income from an investment will continue to be paid in the amount expected and at the time expected.

Safety of principal - refers to whether the principal value of the investment available at the outset will be available at maturity.

Both categories of safety can vary in degree with specific investments.

Liquidity:

Liquid investments can be converted quickly into cash for emergency use or investment opportunities. Community Associations need liquid funds because a major repair or maintenance job could arise at any time.

Yield:

Yield is simply the return received on the investment. Generally, the longer the maturity period, the higher the yield; the shorter the maturity period, the lower the yield. Hence, a five-year CD usually yields more than a one-year CD. Also, the safer the investment, generally the lower the yield.

The Board can protect its investment choice by addressing the following topics, before formulating an overall investment policy:

How is the amount of the monthly assessment determined?

When the budget is prepared, the amounts necessary for the daily operation and long-term reserves for maintenance and replacement are determined based on the level of service for which the association is both required and willing to pay. For example, sometimes there are specific items defined in the CC&Rs that require a certain level of maintenance by the association.

Once the annual amount is determined, then it must be collected from the members in order for the association to operate. Each member’s assessment is usually collected monthly, in 12 equal installments. Some associations collect assessments on a quarterly or annual basis. The CC&Rs will normally indicate the frequency of assessment collections.

Are there different types of assessments or fees?

There are several types of assessments that may apply to your association. The California Civil Code defines assessments as either being regular or special. Regular assessments are needed for the operating (day-to-day) and reserve (long-term maintenance) activities of the association.

Special assessments are those levied by the association for major repairs, replacement, or new construction of the common area or for a one-time, unanticipated expense which cannot be covered by the regular assessment (e.g., insurance premiums that unexpectedly rise sharply).

Note, a special assessment should not be confused with a monetary penalty levied by the association against an individual owner to reimburse the association for an expense such as damage to the common area, or imposed as a disciplinary measure for a violation of the rules and regulations. Homeowners can be fined for damaging common areas and/or violating any rules and regulations of the association. Some CIDs establish user fees or special charges for services and activities that are not customary. Typically, these are imposed on an owner specifically benefiting from the service, such as an owner who wants to use the common area pool, clubhouse, or tennis courts to entertain private guests. The fees are usually on a pay-as-you-go basis and generally cannot become a lien on the owner’s unit or interest. There are other types of assessments that may be designated by the CID homeowners association. For example, an association may have an assessment for cable television service. A “reimbursement assessment” may be levied against an individual owner as a charge for damage to the common area resulting from an act by the owner or an owner’s guest. The best place to look for the different types of assessments that may apply to a CID is in the CC&Rs of the association.

Who can increase the amount of the assessment?

The board of directors can increase the amount of the assessment by following certain procedures mandated by California Civil Code sections 5605 and 5610. Even if the governing documents (Civil Code section 4150) are more restrictive, the board of directors may not increase the regular assessment more than 20 percent per year, without the approval of the owners. The board must circulate a budget to the membership 30 to 90 days before the end of its fiscal year (Civil Code section 5300). If the budget indicates that an assessment increase greater than 20 percent is necessary, a majority of the members of the association must approve the assessment. There are also provisions for a board to increase an assessment more than 20 percent without member approval in cases of emergency such as an extraordinary expense required by order of a court, or for repairs to the common area.

What happens if you do not pay your assessments?

Usually, the association will send you a reminder letter as a first step. The law is specific in California regarding the due date of assessments and the overall process that an association must follow regarding delinquent assessments. The law states that if an assessment is not paid within 15 days of the due date, a delinquency occurs, unless the governing documents provide for a longer time. At this point, the association can add a charge to your assessment in the form of a late fee in the amount of $10 or 10 percent of the monthly assessment amount, whichever is greater, unless the CC&Rs specify a lesser amount. Again, the law covering this area is quite clear and the board must follow these procedures.

Once a year, the association will send each owner a copy of the assessment collection policy, which will tell you the amount of the late fee. If your assessment becomes over 30 days delinquent the association has the right to assess interest up to 12 percent per year on the balance that is owed and unpaid. If you still fail to pay your assessments, the matter may be referred to an attorney or foreclosure service. The association has the right to lien your property for the amounts owed as well as other costs such as attorney’s fees. Ultimately, the association can foreclose and take your property for your failure to pay assessments. A personal judgment may also be entered against you. As you can see, it is imperative that all owners pay their assessments in a timely manner. Failure by several owners to pay their assessment obligation could place the association in financial jeopardy.

Last week we touched on a long list of details that go into Board Meetings, both regular and emergency. This week, we’re talking about the 2nd type of Association meetings; Homeowner Meetings. Read on to learn the ins and outs of how these typically run. If you want to catch up on all our other entries in the Board Member 101 series, head to the end of the post to find the links.

Notice

Not less than fifteen days nor more than sixty days before the meeting, the secretary or other officer, as specified in the Bylaws, must either hand deliver or send by United States mail to the mailing address of each unit owner notice of the unit owners meeting. The owner may request, in writing, that the notice be sent to an alternative address. The notice must include an agenda for the meeting and notification of the right of an owner to:

Have a copy of the minutes or a summary of the minutes of the meeting provided upon request. The unit owner may be required by the Board to pay the cost of providing the minutes.

Speak to the Association or Board, unless the Board is meeting in executive session.

Agenda

The agenda must adhere to the same as for Board Meetings (see more on those here).

Meeting

A meeting of the owners must be held at least once each year. If the governing documents do not provide a date for the annual meeting, a meeting of the owners must be held 1 year after the date the last meeting was conducted. If a meeting has not been held in over 1 year, a meeting of the unit owners must be held on March 1st.

Quorum

Unless the governing documents specify otherwise, 20 percent of the total voting members must be present at the beginning of the meeting.

The quorum rules do not change the actual number of votes that are required under the governing documents for taking action on any particular matter.

Special Meetings

A special meeting of the unit owners may be called by the president, a majority of the executive Board, by 10 percent of the unit owners, or any lower percentage specified in the Association’s Bylaws of the total number of voting members.

Did you know there are three types of Association meetings? These three meetings consist of Board meetings, homeowner meetings, and meetings on specific duties. Today we will touch on the details of Regular and Emergency Board Meetings. If you’ve ever wondered about how these meetings work in your community, keep reading and be in the know!

Board Meetings (Regular and Emergency)

Unless the CC&Rs or Bylaws provide a shorter period, a meeting of the Board must be held at least once every quarter and not less than once ever one hundred days.

They must also review the following financial items:

A current year-to-date financial statement of the Association

A current year-to-date schedule of revenues and expenses for the operating account and the reserve account, compared to the budget for those accounts

A current reconciliation of the operating account of the Association

Financial items to be reviewed every quarter and not less than every 100 days:

A current reconciliation of the reserve account of the Association

The latest account statements prepared by the financial institutions in which the accounts of the Association are maintained

The current status of any civil action or claim submitted to arbitration or mediation in which the Association is a party

Notice:

Except in an emergency or unless the Bylaws require a longer period of notice, at least ten days before the date of the meeting, the notice must be sent by U.S. mail to the mailing address of each unit or another address as requested in writing by the unit owner

Or published in the newsletter or other publication circulated to each unit’s owner

Notice may be sent electronically with owner consent

Must state the time and place of the meeting and include a copy of the meeting agenda or date and location where a copy of the agenda may be obtained

Must notice of a unit owner’s right to obtain a copy of the minutes or summary of the minutes at their own expense and their right to speak to the Association or Board, unless the Board is in executive session

Emergency Meetings:

In an emergency, an Association shall send the notice of the meeting by U.S. mail or the mailing address of each unit within the community. If mail is impractical, the notice must be hand-delivered to each unit or posted in a prominent place(s) within the community

Agenda Must Contain:

Topics to be discussed included proposed amendments to the CC&Rs or Bylaws, any fees or assessments to be imposed or increased, any budgetary changes and any proposal to remove an officer or member of the Board

A list of items on which action may be taken, clearly denoting what action might be taken by the Board

In an emergency, the Board may take action on an item which is not listed in the agenda

A period devoted to owner discussion scheduled at the beginning and at the end of the meeting. Except in emergencies, no action may be taken upon an issue raised during the homeowner discussion

Executive Session - A Board may meet in executive session only to:

Consult with an attorney for the Association on matters relating to proposed or pending litigation if they contents of those communications are subject to the attorney-client privilege

Enter into, modify or take other action on a contract between the Association and an attorney

Discuss the character, alleged misconduct, professional competence, or physical or mental health of a community manager or an employee of the Association

Discuss a violation of the governing documents alleged to have been committed by a unit owner, unless the unit owner requests in writing that an open hearing be conducted

Discuss the alleged failure of an owner to adhere to a schedule

A unit owner is not entitled to attend or speak at a meeting of the Board held in executive session

An open hearing of the Board on an alleged violation of the governing documents may be held pursuant to the written request of the unit’s owner who allegedly committed the violation. Such owner may attend all portions of the hearing and testify concerning the alleged violation, except for deliberations of the Board.

Homeowner Comments:

A period for homeowner comments and discussion must be scheduled for the beginning (Agenda items only) or end of each Board meeting

The homeowners are usually given a limited time to speak

Minutes:

The Secretary or other Officer specified in the Bylaws shall cause minutes to be recorded or otherwise taken at each meeting of the Board

Within thirty days after each meeting, the minutes or a summary of the minutes must be made available to the units’ owners

A copy of the minutes or a summary of the minutes must be provided to any unit’s owner upon request and, if required by the Board, upon payment to the Association of the cost of providing the copy to the unit’s owner

Any matter discussed in executive session must be generally noted in the minutes of the meeting of the Board. The Board shall maintain minutes of any decisions made regarding a unit owner’s alleged violation of the governing documents, and shall provide a copy of the decision to the alleged upon request

Quorum:

Unless the governing documents specify a larger percentage, a quorum is deemed present throughout any meeting of the Board if persons entitled to cast fifty percent of the votes on that Board are present at the beginning of the meeting

Voting:

Only votes cast in person, by secret ballot or by proxy, are counted. No votes allocated to a unit owned by the Association may be cast

If only one homeowner from a unit is present at the meeting of the Association, that owner is entitled to cast all votes allocated to that unit. If more than one of the unit owners is present, the votes allocated to that unit may be cast in accordance with the agreement of a majority in interest of the owners, unless the CC&Rs state otherwise. There is majority agreement if any one of the owners cast the votes allocated to that unit without protest made promptly to the person presiding over the meeting

Voting Proxies:

A unit’s votes may be cast by written proxy. A unit’s owner may give a proxy only to a member of his immediate family, a tenant of the unit’s owner who resides in the common-interest community, another unit’s owner who resides in the common-interest community. If more than one person owns a unit, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through an executed proxy. A unit’s owner may revoke a proxy given pursuant to this section only by actual notice of revocation to the person presiding over a meeting of the Association

We recently held a basic training for Board Members at our Nevada Division. Attendees received an overview of the basic things one would need to know on rules, roles and how to run a meeting. With such useful information compiled for the event, we thought it would be great to share with those in the Community Association world. We're already on Part 5, so head to our blog to read the first four, then join us as we share an even deeper look inside our Board Member Boot Camp!

Today we are touching on how to avoid liability:

- Rely upon your professional manager

- Read and understand your governing documents

- Stay informed of changes in the law

- Handle issues in a timely manner

- Consult with outside professionals before making decisions. This could be:

a. Your professional manager

b. Accountants

c. Attorneys

d. Architects

e. Reserve Study Specialists

f. Contractors

g. Engineers

h. Landscapers

i. Insurance Agents

- Avoid conflicts of interests (no gifts or other compensation that would improperly influence their decisions)

- Keep proper records

- Ensure your community is adequately protected

- Adequately funding reserves

- Be respectful of other Directors and owners

- Association meetings (there are 3 types which we will touch on in the coming weeks!)

Have you been keeping up with Board Member 101? In this series, we are sharing all the basic things one would need to know on rules, roles, and how to run a meeting. Today, let's look at Part 3, the Fiduciary Duties of Directors.

The Director must operate in a position of trust and adhere to specific standards of care including:

- Obligation of good faith

- Place the interests of the Association ahead of their own

- Avoid conflicts of interest when

a. Voting on a contract where a Director's company is a bidder

b. Deliberating or voting on a fine for violations of the governing documents regarding your own home

c. Company you work for has an ownership interest in a bidder

- If conflict exists, recuse him/herself and not deliberate, participate, or vote on the pending matter

All officers and members of the executive Board are fiduciaries and shall act on an informed basis, in good faith, and in the honest belief that their actions are in the best interests of the Association.

Board Member 101 was created to give you a look inside of our recent training held in our Nevada Division. We recapped the roles of association representatives in our last post, and in part two we’re jumping to requirements.

This week let's discuss... What is required of a Board Member?

- Comply with applicable federal, state and local laws.

- Enforce the provisions of the governing documents.

- Hold meetings with such frequency as to properly and efficiently address the affairs of the Association.

- Ensure the Board obtains at least 3 bids from service providers who possess proper licensing for any service used.

- Ensure the Board consults with appropriate professionals before making major decisions.

We recently held a basic training for Board Members at our Nevada Division. Attendees received an overview of all the basic things one would need to know on rules, roles and how to run a meeting. With such useful information compiled for the event, we thought it would be great to share with those in the Community Association world. We’ve broken it down into bite sized posts you can read through at your convenience and come back to reference if you have any questions! Let’s take a look inside our Board Member Boot Camp, first up:

What are the roles of Association representatives?

- The Executive Board is comprised of at least 3 directs, all of whom must be unit owners.

- This Board elects the Officers.

- Officers include a President, Secretary and Treasurer. In some cases, one person is permitted to hold two or more offices.

- Officers serve at the will of the Board.

- All members must certify within 90 days, that they have read and understand the provisions of the governing documents.

- Board Members are required to exercise the ordinary and reasonable care of directors of a non-profit corporation.

It is with great pride and pleasure to announce that one of our fellow employee owners, Pam Hunt, is the winner of the 2017 CACM Vision Award!! Through the Vision Awards Program, CACM identifies those who exemplify the very best in the profession of community management; honors their contributions to the profession; and recognizes the positive difference that they have made in the lives of their colleagues, association homeowners and the communities in which they live.

We wanted to share the nomination narrative that was submitted to CACM to recognize Pam's hard work and dedication to the communities she serves with pride every day.

In just over two weeks, Southern California experienced two catastrophic fires that consumed well over 8,000 acres and destroyed dozens of homes in Orange County. Shortly after this, a fire burned more than 50,000 acres in Northern California wine country, destroying at least 1,500 homes and business and forced an estimated 20,000 people to evacuate the area. It was an alarming reminder for many of us the impact brush, grass and forest fires have on individuals, properties and the economy. Knowing this impact well before this tragedy occurred, is what triggered this manager to take a proactive approach and work towards eliminating the related hazards that a brush or grass fire could cause upon her community association.

Due to this particular association’s proximity to a high fire hazard zone, this manager had to work closely with her board, community, and the Orange County Fire Authority (OCFA) to ensure that they complied with their Fuel Modification Plan and Fire Safety Awareness Programs. With an association that covers over 65 acres, two-thirds of which is maintained by the Association, this was no easy task. The community was planned in accordance with the Fuel Modification requirements and standards that were in place almost two decades ago and over the years, this community successfully managed their green space, hillsides, and common areas in accordance with these standards.

However, in the past few years, the Fuel Modification County Guidelines changed substantially. The current association budget could not sustain long-term management of the costs required to meet the updated FuelModification guidelines as the zones were outlined. In an effort to minimize the financial impact to the community, while complying with these new guidelines, and of course protecting the community from wildfires moving forward, the HOA Board and this community manager worked tirelessly with the assistance of Fire Safe Counsel to reduce the overall fuel modification zones with the OCFA and to optimize the current areas.

After a year of meetings, with OCFA and a Fire Modification Specialist firm, this manager was instrumental in obtaining OCFA approval on a revised 2017 Fuel Modification plan for her community association. The revised plan continued to reduce the risk of wildfires, while also reducing community water usage and the environmental footprint. As part of the plan, the community manager facilitated and ensured completion of a large-scale, community-wide project that included removing existing plant material within 50 feet of all properties, replanting areas and slopes with drought tolerant, certified low fire risk material and re-engineering of the watering zones.

However, she did not stop there. In facilitating this project, she learned of the “Firewise USA” program. This national program empowers neighbors to work together in reducing their wildfire risk by taking action and ownership in preparing and protecting their homes against the threat of wildfire. The application process is not an easy one. A community must first develop an action plan that guides their residential risk reduction activities after obtaining a wildfire risk assessment from the state forestry or fire department. The community then sponsored and held a “Firewise Day”, in addition to a required monetary and volunteer-hour investment in local Firewise activities.

With her knowledge and expertise in the community management field, as well as in working with fuel modification plans at this and other communities, she guided the board and membership through the application process, and as a result, this association was recently recognized as an official Firewise Communities/USA community, joining over 1400 communities nationwide that have been recognized since the program’s inception in 2002. With this designation, the community will get preference when allocation of grant money is made for wildfire safety or fuel mitigation. In addition, the Association is exploring its eligibility for lower fire insurance options, state and national grant funds and other Firewise community program benefits.

By far the most notable result from this manager’s effort was that the community withstood the Canyon Fire 2 in early October, which ravaged through the eastern edge of Orange County and came within a stone’s throw of this association. This community manager’s passion, dedication and commitment to the betterment of her communities was evident in her perseverance; working tirelessly with this association to promote wildfire education, planning and action to reduce the risk of death, injury, property and economic loss. Because of this, she is well deserving of the CACM Innovator Award!

Unless you’ve been living on your own private island, in the middle of the south Pacific, with a coconut drink in your hand, you definitely know this year’s flu season is abnormally bad. According to Dr. Dan Jernigan, CDC Influenza Division Director, “This is the first year we had the entire continental U.S. be the same color on the graph, meaning there’s widespread activity in all of the continental U.S. at this point.” Aside from getting a flu vaccine, here are some common things that you should disinfect immediately.

Cell Phones

Deep Clean your Cell Phone With the amount we use our phones, it shouldn’t be a surprise that a 2012 study by the University of Arizona found that cell phones have more germs than toilet seats. Yuck! Keep your hands clean, wipe down the surface with an antibacterial microfiber cloth, and spray cleansers onto a cloth rather than directly on the screen to prevent damage.

Kitchen Counters and Faucets

Since the kitchen is usually the familial gathering spot, the counter and faucet get touched by germy hands constantly. To keep this area bacteria-free, spritz porous stone (like granite) with a disinfecting spray. To unearth stuck-on gunk around the faucet try Mrs. Meyer’s Vinegar Gel Cleanser and let sit for three minutes before wiping away.

Don’t Forget the Doorknobs

Germs last longer on surfaces than you might think. To sanitize the doorknobs around your house (focus on high-traffic spots, like the bathroom door), cleanse them with a germ-destroying wipe, such as Clorox Disinfecting Wipes.

Disinfect Stuffed Animals and Blankets

If the kiddos have been sick, make sure their favorite stuffed animal isn’t holding onto their germs. Check the tag on stuffed animals to see if it can go in the washing machine, then place it inside a pillowcase secured with a twist tie. Use Woolite, wash on the gentle cycle and tumble dry on a cool setting. Throw their blankets in there as well.

Toothbrush and Toothbrush Holder

It is particularly important to clean your holder regularly if it has a closed bottom, like a cup. Wash your toothbrush holder or cup with soap and water. Your toothbrush can be put into the silverware compartment of the dishwasher to be sanitized. You can also soak your toothbrush in antibacterial mouthwash; rinse thoroughly before next use.

With the advent in the past 5 years of short-term rental websites and apps like Airbnb, VRBO, and Homeaway, many homeowners raced to see what their association’s governing documents allow when it comes to leasing and renting of lots and units. Many individuals praise the growing popularity of short-term rentals, citing the economic benefits for those renting out their properties, and the benefits of convenience, comfort, and choices for those looking for alternatives to the hotel industry. However, not everyone sees agrees with these benefits, and point to the less desirable traits that these “weekend guests” bring with them, such as increase in traffic, security issues, and increase in noise and trash, etc.

Many questions are starting to be answered by state and municipal legislatures, as well as associations, on how they will deal with this growing trend.

Arizona Law Currently Allows Associations to Prohibit Short-Term Rentals

In 2016, Arizona’s Governor signed Senate Bill 1350 into law, officially prohibiting Arizona cities and towns from prohibiting vacation rentals or short-term rentals. This bill is codified in A.R.S. Section 9-500.39. Although cities and towns can still create rules and regulations governing short-term rentals and fire codes, health and sanitation, and zoning ordinances, no municipality can legally prohibit short-term rentals.

With cities and towns no longer able to prohibit short-term rentals, many Associations began examining what their own documents have to say about short-term and vacation rentals. Currently, Arizona law does not prohibit associations from disallowing short-term rentals in their communities. Although this may change in the not-too-distant future, associations are allowed to regulate and prohibit short-term rentals.

What Kind of Association Restrictions are Enforceable?

Although the Arizona legislature has not yet taken away associations’ ability to prohibit short-term rentals, Arizona law is quite specific about the manner in which associations must prohibit these types of leases. Specifically, Arizona law states that an owner may use his property as rental property unless rentals are prohibited in the Declaration, including any time period restrictions contained in the Declaration. See A.R.S. Section 33-1260.01(A) (for condominiums) and A.R.S. Section 33-1806.01(A) (for planned communities).

Essentially, this means that any rental prohibitions or time period restrictions contained in other Association documents (such as the Bylaws or in Rules and Regulations) are insufficient to restrict owners’ use of their property for rentals. The restrictions against rentals must appear in an Association’s Declaration (CC&Rs) to be enforceable. If your Association’s CC&Rs are currently silent on the rental issue, the document must be amended to include any restrictive language – a Board resolution or policy will not do. Also note, however, that the Association can also make Rules governing leases if there is a rental-restriction provision in the CC&Rs, as discussed further below.

Further, there are also questions raised about what kind of language in the CC&Rs is sufficient to restrict or prohibit short-term rentals. For example, obviously a provision in the CC&Rs that states “Owners may not lease their Unit for fewer than 30 days” is a clear restriction against short-term rentals, and is

enforceable. However, what about more ambiguous language such as “the Unit shall not be used for transient or hotel purposes,” or simply that the Unit shall not be used for “business purposes.”

Currently, case law throughout the country comes to differing conclusions on whether the “Business Use” restrictions in CC&Rs prohibit short-term rentals, such as weekend Airbnbs. The same is true for the “hotel” or “transient” language in some documents. Arizona courts have not yet weighed in on this issue. One court considered whether the listing for the rental included typical hotel “amenities” such as fresh towels, complementary WiFi, maid service, room service, etc. in holding that an owner’s use violated the provision restricting a Unit’s use for hotel uses. As short-term rentals continue to expand, certainly more courts will weigh in on this issue and provide further guidance.

What Information from Tenants is the Association Entitled to?

Even if the Association’s CC&Rs prohibit rentals for less than thirty days, the Association can generally create “leasing rules” to govern any owners who do rent their units. For both condominiums and planned communities, Arizona law allows Associations to require owners to provide (1) the names and contact information for all adult tenants; (2) the time period of the lease; and (3) a description and license plate numbers of the tenants’ vehicles. See A.R.S. 33-1806.01; A.R.S. 33-1260.01. An association may also charge a fee of not more than $25 to process this information.

Keep in mind, associations are always prohibited from requiring an Owner to provide the Association with a copy of the tenant’s rental application, credit report, lease agreement/contract, and cannot charge a fee greater than $15 for incomplete or late information.

Contact an Arizona HOA Lawyer for Further Help

At Goodman Law, our sole focus is on meeting the legal needs of HOAs, including creating and implementing HOA policy and responding to homeowner concerns. Contact us today to discuss any legal challenge your HOA is facing.

Have you ever wondered which home improvements will give you the most bang for your buck? Here are the top remodeling projects that may increase your home’s equity:

#1 Landscaping

Are you shocked? I bet you thought it would be a major kitchen reno at the top of the list. A little color and light landscaping can make a big difference to your home’s curb appeal, and that is a big equity-booster.

What does a basic landscaping upgrade include?

· Flowering shrubs

· A 15-foot-tall deciduous tree

· A flagstone walkway

· Two 6-by-2 stone planters

· Fresh mulch

#2 A New Roof

No one wants to move into a place with water stains on the roof or walls. Yuck, what a turn-off!

Here are some signs it’s time to spring for a new roof:

· Shingles are missing, curling up, or covered in moss

· Gritty bits from the asphalt shingles are coming out of the downspout

· The sun’s shining through your attic

· You notice stains on ceilings and walls

· Your energy bill is sky high

#3 Hardwood Floors

If only real life was like all those home renovation shows where the couple rips back that shaggy 70s carpet only to find beautiful original hardwood floors. If that isn’t the case in your house then you might want to consider putting in some hardwoods. If you already have them, a fresh finish is a nice touch when comes time to sell.

#4 Patio or Deck

If you followed Step #1 then you have a beautiful landscaped yard, but where will you enjoy it? Your new or refinished patio or deck, that’s where!

#5 Garage Door

A new garage door will bump up that curb appeal at a relatively modest cost.

#6 New Siding

Pick any color in the rainbow and never have to paint again! These are just a couple of reasons to go with vinyl siding. Make sure you get siding with a fade resistant finish and a lifetime warranty that is transferable to the new owner when you sell.

As with any home renovation project, it is important to connect with your community management company before starting. At The Management Trust, we can help guide you through the process and help ensure you are abiding by the Covenants, Conditions and Restrictions for your community.

The employee owners of The Management Trust understand that quality and value are defined anew in every interaction we have with our homeowners and volunteer directors. Accordingly, we have established this Customer Bill of Rights to memorialize what every customer can expect from every Management Trust employee owner every day.

As a customer of The Management Trust you have the right to:

Feel like you are the most important person to us.

First person resolution when possible. That is, our employee owners will own your need until it is resolved or properly handed off to another team member for resolution. Although voicemail is a necessary part of the business world, we try our best to minimize its use and respond quickly when we do.

Be treated with respect and with the highest level of integrity because we are professionals.

Be treated with warmth and hospitality because we care.

Know you have been heard. We will not end any interaction until we have demonstrated that we understand your needs and have communicated to you our agreed upon next steps.

Value demonstrated through delivered results. When possible, we will offer alternative means of resolution so that you may choose the path that best fits for you.

Timely response. Voicemails and/or written communications will be responded to by the end of the next business day. Emergencies will receive an immediate response.

Leadership Management. We will work towards anticipating the needs of your community and offer guidance to the board and homeowners as appropriate.

Well-trained professionals. We are experts in the field of community management, and knowledgeable of the needs of your community.

Quick resolution to breakdowns. We own our mistakes and work tirelessly to correct them.

Fidelity. We know that we are in a position of trust with your community.

Typically, the corporate officers are also members of the board of directors, however, this may not be a requirement of the governing documents. Officers are appointed/elected by the members of the board and not by the membership. The appointment and responsibilities of the officers are generally stated here and may be more specifically described in the bylaws. Besides being a legal requirement in the bylaws, why should a board meet?

Like any family, sometimes there are misunderstandings about decisions made. Board meetings offer an opportunity to remove fear and confusion and replace it with supportive and shared responsibility.

Here are other reasons:

Builds synergy with owners.

It’s effective management.

Hear about the progress in the achievement of the various objectives of the corporation.

Hear reports of board committees and make policy decisions when required.

Provide a vehicle for board members to meet board members, for the board to meet the manager and for all owners to meet the board.

Provide on-going directives to the manager.

Maintain control over the organization to give guidance to committees.

Here we will continue the discussion of committees. If you haven’t already, click over to Part 1 here where we talk about their basic responsibilities.

For the board to be able to evaluate the conduct of committees it is important that periodic reports be submitted. These reports should be provided to the board (usually via the community manager) in writing and in advance of the board meeting, or as set forth in committee guidelines established by the board.

Board members need not attend committee meetings (unless required by the governing documents) however, board members have a right to attend. Board members need not participate in the committee meeting unless the committee chair requests them to do so. This practice is similar to the owner forum at a board meeting. Unless specific authority has been given to the attending board member, the board member may not “officially” represent the position of the board at a committee meeting, unless that position is current board policy. Remember – the board speaks with one voice or not at all.

Many boards choose to appoint members of the board as their committee liaisons so the conduct of the committees can be more carefully monitored. Whatever committee structure is chosen, it should be clearly defined and properly documented. Committees can be one of the most helpful tools in the governance of the association, or they can be a hindrance, depending on how well the board establishes and communicates with their committees.

Yes. The board may delegate authority to the manager and they may also utilize the committee structure to assist them in carrying out their duties and responsibilities. Some committees are mandated by the association’s governing documents, usually in the CC&Rs and/or bylaws.

If the governing documents do not require specific committees, the board may create and develop a committee structure to meet the needs of the community. Remember - committees are appointed by and serve at the pleasure of the board. The board establishes guidelines, goals and objectives for each committee. These should be reviewed and documented periodically.

As with any responsibility that involves volunteers, it is important to define who does what, how they accomplish the tasks, who is responsible, and to develop a system of rewarding the volunteers. Committee charters (aka job descriptions) are valuable tools to define the necessary structure for association committees.

A homeowners association (HOA) is a legal entity that governs a community of homes, including condominiums, townhomes, and single-family homes. HOAs operate within state statutes to enforce the rules and regulations and collect assessments from homeowners, all while taking care of maintenance repairs of common areas.

Recent studies have shown that over 66 million property owners are part of an association. With so many of us being a part of an HOA, we wanted to recap… why exactly is your HOA important?

Homeowners associations define and enforce the rules of the community set forth in the CC&Rs. Such rules exist for the betterment of the neighborhood since they help maintain the community’s appearance and home values to the benefit of all community owners.

HOAs define a budget for the community. Budgets typically include funds for the common area utilities (water, sewer, trash, and electricity), insurance, and the repair, maintenance, replacement, and restoration of various components within the community.

Community appearance. Homes within an HOA must meet the standards set by the association, so you're less likely to see unkempt lawns, peeling paint or a brightly painted house.

Common area. Homeowners associations handle the upkeep of swimming pools and tennis courts and other recreational areas so the common areas and shared amenities in a neighborhood are likely to be maintained in a good condition.

Say goodbye to pests. Most associations will go to great lengths to eliminate pests in the area. There will be no raccoons climbing into your garbage or termites eating up your walls.

A well-managed HOA provides financial stability by ensuring the HOA has an adequately funded reserve account available for future common area repairs and capital improvements, thereby reducing the likelihood of special assessments down the road.

In general, your HOA will provide a uniform, well-kept community, peace among neighbors and home value protection.

What are some other questions you might still have about your association? Ask in the comments and we will try to add clarity in a future blog post!